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Discussion Starter · #1 ·
Warner Takes Aim at Redbox, Netflix

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Warner Home Video is drastically changing the way it sells DVDs and Blu-ray Discs to rental kiosks such as Redbox and by-mail services such as Netflix.
Quote:
But industry sources say the most revolutionary aspect of the new policy is that it targets not just kiosks but also subscription rental services. They maintain that Netflix and other by-mail renters, too, will be subject to a 28-day window on new Warner DVD and Blu-ray Disc releases unless they strike revenue-sharing deals with the studio. Sources say Warner has no such agreements in place with Netflix.
http://www.homemediamagazine.com/war...-netflix-16749
 

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Why did Warner make it a bug when it could have been a feature?


Warner could have announced instead that they were reducing the sell-through disc release window on average by 28 days, but not the rental window.


If they made good on such a promise, home theater fans could watch the movie on their setups a month sooner, albeit by buying rather than renting.


SCD
 

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Quote:
Originally Posted by SDouglas /forum/post/17002638


Why did Warner make it a bug when it could have been a feature?


Warner could have announced instead that they were reducing the sell-through disc release window on average by 28 days, but not the rental window.


If they made good on such a promise, home theater fans could watch the movie on their setups a month sooner, albeit by buying rather than renting.


SCD

They have moved the home video window up so aggressively that there isn't much room, they would crowd the theatrical release window.


Theatrical release still brings in a lot of money and also establishes the value of the films.
 

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 On page 45

"We have entered into revenue sharing arrangements with more than 50 studios and distributors. The arrangements cover six of the top eight studios, including Buena Vista Home Video, Columbia TriStar Home Entertainment, Dreamworks International Distribution, Twentieth Century Fox Home Entertainment, Universal Studios Home Video and Warner Home Video."
 

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See also;

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http://www.deadlinehollywooddaily.co...e-warner-bros/


Analyst Predicts Redbox Will Sue Warner Bros Within A Week; "But Bigger Question Is Will Netflix Sue Warner Bros?"


"Given that Redbox has sued Universal (45 days) and Fox (30 days) over their windowing strategies, we would expect Redbox to sue Warner Bros (28 days) in short order, Greenfield predicts -- maybe as soon as next week. "While Sony, Lionsgate, Disney (and likely Paramount) appear to be happy working with Redbox directly or via distributors, we have a hard time understanding how a studio would not feel threatened by Redbox’s current business model, as it sets an ultra-low price point for movie content that will impact consumers’ decision-making process about all forms of movie-related commerce (theater-going, DVD purchase, Video-on-Demand, electronic/online rental/sell-thru, etc…)."
 

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Desperation move. Ultimately there is nothing any studio can do to keep Netflix, Redbox or any rentailer from obtaining and renting movies at whatever price they want.


Unless studios want to go back to "rental pricing" like they did back in the VHS days and absolutely obliterate the sell-through market that served them so well during the growth period of DVD.
 

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Originally Posted by fpconvert /forum/post/17005853


This news did not seem to help NF stock this week even with the big buyback plans.

Coinstar got hammered...down $5...ouch.

Netflix was up $1 for the week, and is up slightly over the weekend in after hours trading. That is up more than 2% of what could have been a rough week (and despite analysts trying to downplay them).


You are right about Coinstar. They dropped 12% for the week!



Interestingly enough, Blockbuster also took a beating on Friday, and was down more than 5% for the week and are now trading at $.72 a share.
 

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Originally Posted by uvwx304 /forum/post/17005291


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Quote:
Originally Posted by PSound /forum/post/17005764


Desperation move. Ultimately there is nothing any studio can do to keep Netflix, Redbox or any rentailer from obtaining and renting movies at whatever price they want.


Unless studios want to go back to "rental pricing" like they did back in the VHS days and absolutely obliterate the sell-through market that served them so well during the growth period of DVD.

This this model is an option and they can dictate rental prices, it may be their next move to control prices and disc prices as well.
 

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Discussion Starter · #15 ·

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Originally Posted by 42Plasmaman /forum/post/17008999


This this model is an option and they can dictate rental prices, it may be their next move to control prices and disc prices as well.

Those days are over. All they are doing is digging themselves a hole to be buried in - those that are fighting Redbox.
 

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Does anyone here remember when WB first tried the revenue-sharing model for rental video tapes in the early 1980's? They supplied specially-marked tapes to rental stores, and they got a cut of each transaction. The scheme didn't last long. In recent years, though, revenue-sharing seems to be the normal way the big rental chains work with the studios. If Redbox or another company wants to just buy discs and keep all the rental revenue, I don't know that any studio could stop them, and these delay schemes sound illegal to me-some variation of restraint of trade or unequal access. Is this ultimately any different at all from, say, a studio delaying releases of discs into poor neighborhoods or other locations?
 

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Discussion Starter · #18 ·

Quote:
Originally Posted by 42Plasmaman /forum/post/17010563


Care to elaborate why?

It has already been explained.


Redbox and the other kiosk manufacturers have already publically stated that if they can't buy new releases from either wholesalers, or the studios themselves - they will buy them from retailers like BB or WM.


Nice to see a company(s) that care enough about their customers that they will not bow down to the money hungry, greedy Hollywood studios and are willing to do something about it - like haul their a$$ into court over anti-trust, misuse of copyright and restraint of trade.
 

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Quote:
Originally Posted by rezzy /forum/post/17007392


Warner has the insane dream of ruling the world; they make me ill....

I don't know that Warner is in any different position than Universal and Fox.

RedBox have already sued Fox over this, Universal and Warner are expected to to be next.


Ineresting position for Blockbuster in all this. Are they playing a dangerouse game to try to save themselves?


The internet tech guys at TechCrunch have a take on this under the headline;

(read the whole article and the comments to see the reactions from people involved in digital delivery applications)

Quote:
The Movie Studios Have A Great Idea To Ramp Up Piracy. And Blockbuster Wants To Help.
http://www.techcrunch.com/2009/08/14...wants-to-help/


Movie piracy is a problem, but it’s not as huge of a problem as music piracy was this past decade. While certainly the size of the movie files and the need for fast broadband connections to get them in a reasonable amount of time plays into it somewhat, also helping is the fact that there are some fairly decent ways to get movies quickly, for a pretty fair price these days. And now Hollywood is apparently trying to change that.


The studios are starting to rally around a horrible new idea: Keeping new releases out of Redbox and more importantly, Netflix for 30 days. Let me repeat that: They think Netflix shouldn’t be able to ship many new movies to you until 30 days after they’re released on DVD.


Now, this doesn’t appear to be set in stone yet for Netflix, as the studios are said to be currently negotiating this with the company, but it is what the studios want. And the strategy is going forward with Redbox, which recently filed a lawsuit against 20th Century Fox over the same issue. And now, with Universal and Warner Brothers getting on board, another lawsuit seems likely.


And in a move that couldn’t be less surprising, Blockbuster is on the wrong side of this. Despite the company having a strategy to do a massive roll-out of kiosks like the ones Redbox has, it is all in favor of the 30-day window, based on comments CEO Jim Keyes made during its Q2 earnings call.


Why? Well the company once again completely bombed in those earnings, posting a net loss of $36.9 million, while overall sales fell 22 percent in the quarter. It is getting fleeced by the likes of Redbox and Netflix and needs to gain some sort of competitive advantage in movie rentals. A 30-day rental window for its stores would certainly offer that.


Of course, as the name synonymous with movie rentals for the past couple of decades, Blockbuster could have used its power to get ahead of some of these trends (by-mail rentals, cheap kiosks, online rentals/streaming), but didn’t. So now they will have to rely on the movie studios attempting to put stricter rules in place for gaining access to its movies right away. Rules, that would seem to be basically prodding users to obtain those movies illegally.
 
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